A Profit-Maximizing Skeet (Competitive Clay Pigeon Shooting) Club Segments Its

question 1

Multiple Choice

A profit-maximizing skeet (competitive clay pigeon shooting) club segments its market. It charges juniors $4 per round based on their price elasticity of demand of -2.0. Its adult shooters have a price elasticity of demand of -1.4. The marginal cost per round does not vary by the shooter's age. What price does the skeet club charge adult shooters?

• A) $7
• B) $8
• C) $6
• D) $5.75

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Definitions:

Tax Liability

The total amount of tax that an individual or a corporation owes to the government.

Income

The total amount of money earned or received by an individual or group, typically within a specified period, from work, investments, or other sources.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, illustrating the impact of the next dollar of earned income on their tax liability.

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income, showing the percentage of income that goes to taxes.